Corporate Governance, SOX, and the Business Judgment Rule

Audio interview with CEO coach John Rehfeld

John Rehfeld is a seasoned marketing-driven CEO with 30 years of software, content, and hardware experience in the PC, digital imaging, and multimedia industries. He has a strong track record of commercializing technical innovations through third party distribution channels into the business and consumer markets. He also has significant international strategic relationship experience with Asian companies, especially at the senior executive level, and has been a Federal Trade Commission monitor overseeing and reporting on the sale of a software division to EDS. In 1988, he was named one of the top 25 computer industry executives by Computer Reseller News.

John Rehfeld is currently working as a CEO coach for six CEOs in California and is serving as an outside board of director member of three software and hardware companies. He is also the Chairman of the Forum for Corporate Directors in OC and an adjunct professor of marketing and strategy for the Executive MBA Program at the Graziadio School of Business and Management of Pepperdine University. He is also a member of the GBR Editorial Review Board.

He has published several articles on the role of the board in CEO transition, and in 1994 he authored Alchemy of a Leader. Mr. Rehfeld received a Bachelor of Science in Chemical Engineering from the University of Minnesota. He completed his MBA at Harvard University.

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Questions for Mr. Rehfeld:

What is the role of an outside board of directors member?

What are the various positions board members can hold?

What is the role of the advisory board, particularly in new start-ups?

How does the board evaluate CEO effectiveness? How do they decide compensation?

What are the arguments for and against keeping the CEO and board chairman positions independent?

How do you think the upcoming presidential election could impact corporations? Do you think further regulation and scrutiny may be in store?

In a 2005 GBR article, you wrote that with Sarbanes-Oxley (SOX) now in place at most publicly held companies, many boards of directors are shifting attention to issues that are more likely to grow revenues and profits. What are the most significant ways in which SOX has changed the way boards operate… for better or for worse?

Has the Act achieved its goal of restoring public confidence in the nation’s capital markets and strengthening corporate accounting controls?

What was your career path? As an engineer, what led you to pursue an MBA?

What are some of your proudest professional achievements?

What about some of the mistakes you have made along the way? What have you learned from them?

Given the current economic downturn,* what advice you give to the CEOs you coach and your students in the executive MBA program?

What advice would you give to those interested in serving on corporate boards?

What advice do you have for current and recently graduated MBA students? What did you wish you knew then as a new graduate?

*Editor’s Note: This interview was held in August 2008.

The “GBR Jingle” was composed by Kyle Rotolo, who was born and raised in northern New Jersey. There he played in a number of rock bands and aspired to become a songwriter before moving to Malibu. At Pepperdine he is a music composition major studying with N. Lincoln Hanks.

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